I did a quick spread sheet on social security at various ages at amounts I would currently be receiving. It showed that if I take the reduced amount at 62 versus 70, the payback for waiting would not hit until I was 83. So I'm going to take it at 62 as there are just too many downside variables with that long of a time frame. The biggest being is that SS goes bust or there are reductions in actual dollars.
Not to lecture anyone but...
Between age 62 and the year you reach FRA, if you have earned income (W-2) greater than $21,000.00 or so dollars, you are penalized one dollar for every two dollars over that amount. The year you turn FRA the penalty becomes one dollar for every three dollars over. So if you plan on working full time it is probably best to wait to collect SS until FRA at the minimum because the penalty then goes away. As an example, if your W2 income is greater than about $65K then you would not get any SS but would be locked in (with a few exceptions) to the age 62 or whatever rate you file for.
I personally make over $65K/year so I'm waiting past FRA at the minimum. I reached FRA last January but my wife is going to retire at the end of this year will collect SS. At some point the two of us will become the one of us and the surviving spouse will get the greater of the two SS benefit. Once you hit 70 there is no point in waiting to collect SS as you max out on the dollar amount. Note that COLA adjustments are based on your benefit amount so the individual; that waits to 70 will not only get a higher benefit amount, their COLA adjustment will be greater. Most people who wait to 70 get slightly more than double the SS benefit than what they would get at 62. This is important especially if you have little or no retirement savings.
I have no agenda here, my feeling is retire when you want. But for me and my wife, we have been on a personal financial tear for almost 8 years and have a decent sized portfolio, no debt and a paid for home and cars. A general rule of thumb is if you think in terms of salary or payday amounts, you probably should not take SS early. If you think in terms of household net worth, you probably are ready to retire or you at least know what to expect. My age 70 SS benefit will cover our normal living costs, My wife's SS will cover our normal living costs, my spouses pension will cover our normal living costs and will pay me if I outlive her and using the 4% rule for withdraws from our retirement nest egg will cover our normal costs. So in short, we will have 4 times the monthly income needed to survive if all goes to plan.
